Angela Merkel has asked Theresa May if she intends to request an extension to article 50 after reports that No 10 has drawn up contingency plans to delay leaving the EU.

A government official confirmed that Merkel “fleetingly” raised the matter at a 45-minute breakfast meeting in Sharm el-Sheikh on Monday morning, in a reflection of growing concern from European Union leaders over the lack of time to implement Brexit.

Asked if the possibility of a two-month delay was discussed, the official said: “It wasn’t something that the PM raised. The position is that it is not something she [the PM] wants to do and she believes it just defers difficult decisions.”

“They did discuss Brexit, they discussed UK parliament, things that have been happening in UK parliament, things that are happening this week. They spent a decent amount of time talking about foreign policy as well as Brexit.”

The official said the issue of extending article 50 came up “fleetingly”, but insisted “it really wasn’t a focus”.

According to Monday’s Daily Telegraph, Downing Street officials have drawn up a series of options in a bid to avoid resignations by ministers determined to support a backbench bid to take no deal off the table this week.

Asked if the story was true, a government official said they did not discuss advice given by officials.

EU officials meanwhile said a “constructive meeting” between the European commission president, Jean-Claude Juncker, and May in the margins of the summit had taken stock of “good progress” in shaping the package that will be put to the Commons.

The two leaders discussed developing the political declaration to offer greater clarity over the future. They also took stock of “the work process on alternative arrangements for the future and possible additional guarantees on the backstop”.

The EU is seeking to spell out how a technological solution to the Irish border might, in time, be found while translating previous written assurances over the temporary nature of the backstop into a legal protocol for May to take to the Commons.

“The president and the prime minister agreed on the need to conclude this work in time before the European council on 21 March,” the official said. The EU’s chief negotiator, Michel Barnier, is to hold further talks with British negotiators on Tuesday in Brussels.

There are doubts, however, in EU capitals about the chances of MPs being won over by the extra guarantees, with discussions taking place over the length of the extension that Brussels might grant the UK should a request be received.

The Dutch prime minister, Mark Rutte, expressed the EU’s determination to avoid granting a short extension only to have to repeatedly revisit the issue due to a lack of direction in London.

Rutte said: “It’s up to the UK. If the UK asks for delay, the EU will ask: what do you want with it? We don’t want to go round in circles for the next couple of months. What will be achieved by it?”

He added: “We are sleepwalking into a no-deal scenario. It’s unacceptable and your best friends have to warn you. Wake up. This is real. Come to a conclusion and close the deal.”

Leo Varadkar, the Irish taoiseach, told of his confidence that a no-deal Brexit was less likely given the evidence that MPs were planning to instruct May to extend article 50 in the event of a revised deal failing to get through the Commons.

He also hinted at the growing traction among EU heads of state and government for a lengthy extension, with senior officials exploring the idea of a 21-month delay to Brexit.

“A long extension creates a complication in relation to the European elections, but that’s a small complication relative to the impact on our economy,” Varadkar said. “A lot of colleagues feel if there is an extension it should be an extension with a plan, rather than an extension just to continue negotiations which have gone on for almost two years. I feel that the chances are that that won’t happen and that we will either have a deal that is ratified or that we will have an extension.”

The prime minister is meeting Varadkar on Monday as part of her talks with EU leaders in Egypt, a senior UK government official said.

Earlier, the defence minister Tobias Ellwood hinted that May could be poised to propose the extension and confirmed that if she did not, he was “tempted” to vote for a delay to Brexit.

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“I don’t support the idea that we go ahead towards no deal,” he told BBC Radio 4’s Today programme.

Over the weekend, three cabinet minsters demanded the prime minister stop using the threat of a no-deal Brexit as a negotiating tactic.

On Wednesday, an amendment is due to be tabled by former Labour and Conservative cabinet ministers Yvette Cooper and Oliver Letwin, which would instruct May to seek an extension of article 50 if she does not have a deal ratified by 13 March.

May is due to update the Commons on Brexit on Tuesday after her return from the talks with other EU leaders in Egypt.

Asked if she could announce an extension to article 50, Ellwood said: “You need to wait and hear what she has to say when she gets back.”

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Pressed to clarify whether he knew a delay would be announced, Ellwood said: “That I don’t know. I’m encouraging that to happen because it is not in anybody’s interest to see no deal affecting Britain in the way that we are talking about.”